The merger is viewed as a calculated strategic choice to aid the struggling THAI in recovering from its enormous debt and losses, which were made worse by the Covid-19 outbreak.
The merger between Thai Airways International Plc (THAI) and Thai Smile Airways, a fully owned subsidiary, has been approved by the Thai Airways Creditors Committee.The committee’s choice, made as part of the restructuring plan for the parent firm, was finalized on May 18, according to THAI CEO Chai Eamsiri.
This year, Thai Smile’s fleet of 20 aircraft will be transferred to THAI as a result of the merger. By doing this, it is anticipated that operational expenses will drop by up to 20% while daily flying hours will rise by 11. Thai Smile originally bought the fleet from THAI, which it now leases.
The combination will, according to THAI, increase the use of its planes. The average number of flights operated by Thai Smile each day is now only 9, compared to 12–13 for THAI. Thai Airways hopes to use its Airbus A320 fleet 11 more flying hours per day by incorporating Thai Smile’s planes.
According to Chai, the higher utilization will enable THAI to cover more domestic and international routes, increase the number of nighttime flight hours, and cut operational costs by up to 20%.
The process of transferring the management rights of the 20 aircraft will be started, according to THAI, which also promised to inform the Thai Stock Exchange of the progress. The Thai Civil Aviation Authority and the Ministry of Transport will also receive notifications.
The merger is viewed as a calculated strategic choice to aid the struggling THAI in recovering from its enormous debt and losses, which were made worse by the Covid-19 outbreak. In May 2020, THAI sought bankruptcy protection and underwent a process of rehabilitation under court supervision. Thai Smile Airways, a regional arm of THAI that was established in 2012, has been doing better than its parent business, although it still has difficulties navigating the competitive low-cost market.
The combined company is anticipated to help Thailand’s tourism industry as well as the passengers and staff of both airlines. Along with improved service standards and flexibility, the new airline will give customers additional options. Both airlines’ staff members will be merged into a single workforce with distinct career options and pathways. The new airline’s improved connection and capacity will help the tourism sector as it recovers from the pandemic and supports the industry as a whole.
